Claims etc. - Rule 83: Exclusion of liability

Rule 83 Exclusion of liability

1The Association shall not be liable for errors or omissions in the handling of a case which may be committed by the Association’s employees or by lawyers, advisers or other experts engaged by the Association on behalf of the Member.

2The Association shall not be liable for monies which are lost, having been collected by persons engaged by the Association on behalf of the Member, or entrusted to such persons.

3The Association shall not be liable to pay interest on any sums due from it to the Member.

Guidance

It is considered both necessary and reasonable in the context of mutual insurance that the Association should not be liable for the consequences of any negligence in the handling of a case or for any advice that is given in relation to a case or to a Member generally, whether on the part of the Association’s own employees, or on the part of experts, such as lawyers and surveyors, that are engaged by the Association to handle the case on the Member’s behalf. The reason for this is that any damages or other sums that would be payable to an individual Member in the event of such liability would have to be financed by the membership as a whole, and would, therefore, result in a reduction of the funds that are available to protect the interests of the other Members.

For similar reasons, the Association also has no liability for monies that are lost after they have been collected by, or entrusted to, correspondents, agents or other persons that are engaged by the Association on behalf of the Member.

Finally, Rule 83.3 establishes that the Association is not liable to pay interest on sums that are payable to the Member regardless of the time that may expire between the moment when the Member incurs a liability, cost or expense, and the time when he is reimbursed by the Association.

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